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LPG price skyrockets, deforestation worsens despite 206t SCF deposit

By Kingsley Jeremiah, Abuja
08 August 2021   |   4:15 am
The soaring price of Liquified Petroleum Gas (LPG) also called cooking gas, yesterday, attracted the attention of consumers and stakeholders in the environmental, health, and energy sectors as the commodity....

• More Women May Die From Firewood, Charcoal Smoke
• Nigerians Groan As Naira Devaluation, Global Pricing Keep Price High 
• FG Insists Domestication Critical To Bringing Down Price

The soaring price of Liquified Petroleum Gas (LPG) also called cooking gas, yesterday, attracted the attention of consumers and stakeholders in the environmental, health, and energy sectors as the commodity surged by over 80 per cent leaving a looming health and environmental burden.

For over 90 million Nigerians, who live on less than one dollar per day, cooking gas may have become luxury amid the worsening unemployment situation, galloping inflation rate, and dire impact of COVID-19 pandemic.

The LPG price has continued to soar on the backdrop of the rapid devaluation of the naira, and other economic indices despite the country seating on a 206 trillion standard cubic feet of gas, and the much trumpeted “decade of gas” policy of the President Muhammad Buhari-led administration.

In June, the Federal Government rolled out elaborate plans to boost the use of LPG by Nigerians, as the cooking fuel usage grows from the current five per cent to 90 per cent in the next ten years.

The government equally expressed consternation that annually, nearly one million people are negatively impacted by the use of firewood, charcoal and kerosene for cooking across the country.

Vice President Yemi Osinbajo, while speaking at the opening of a two-day National LPG sensitisation and awareness campaign, in Abuja, said the effective implementation of the National LPG Expansion Plan (NLEIP), would steer Nigerians away from the use of harmful cooking fuel that hurts human and environmental health to cleaner and more efficient energy.

Presently, a kilogram of the cooking gas, which traded for about N300 earlier this year goes for above N500 in parts of the country.

Earlier this year, a 6kg gas cylinder was refilled for N1, 800. It now sells for N3, 000 amidst indications that the price may rise further.

While the country has abundance of gas resources, over 55.47 per cent of the cooking gas consumed in the country in October 2020 was imported making the commodity vulnerable to economic indices, especially the continuous weakness of the dollar against the Naira, and the increasing price of natural gas at the international market.

In May, the naira was devalued from N379/$1 to N410.25/$1. Yesterday, $1 exchanged for N510 at the parallel market, where most Nigerians purchase their foreign exchange. 

The global price of natural gas has also witnessed over 60 per cent increase, trading close to $4 per Million British Thermal Unit (MMBtu) yesterday. 

With subsidy already removed from kerosene as a litre, yesterday, went for N325, the attempt by Nigerians to move towards cleaner cooking fuel, through the use of cooking gas is now an uphill task, a development which threatens the realisation of the Sustainable Development Goals (SDGs).

The development, according to stakeholders would impede the country’s target of increasing domestic LPG consumption to five million metric tonnes (mmt) before the end of this year.

The Petroleum Products Pricing Regulatory Agency (PPPRA) had earlier disclosed that the current consumption stands at about only one million metric tonnes.

As more Nigerians are returning to cooking with firewood and charcoal, stakeholders have raised concerns that the number of women, who die in the country yearly from biomass could double.

It would be recalled that the African Refiners and Distribution Association (ARDA) and other experts had warned of imminent danger if Africa fails to quickly adopt modern clean cooking energy, as over 600, 000 Africans, especially Nigerians may die yearly due to household air pollution coming from firewood and charcoal.

ARDA equally feared that with over 14 per cent of primary forest already lost between 2002 and 2020 due to collection of wood for fuel, deforestation may hit record high if urgent actions are not considered.

Reportedly, the high demand for fuel wood for cooking and income has increased the rate of deforestation. And deforestation has already pushed Nigeria to the verge of environmental disaster, especially desertification, loss of ecosystem, loss of biodiversity, land degradation, soil erosion among others.

Speaking on the implications of the development, a food vendor in the Gwarimpa area of Abuja, Chidimma Elizabeth Godwin, told The Guardian that she resorted to the use of charcoal as the price of gas takes toll on her business.

“I prefer to use gas, but the price is going too high. I have charcoal to balance my profit margin. It is difficult to increase the price because people are also complaining. Sometimes we have to reduce the quantity of the food instead of increasing the price,” she said.

Godwin noted that she feels the impacts of the charcoal on her health, stressing that it was difficult to stay closer to the biomass source compared to gas cooker, but has no option in order to remain in business.

Another trader, Mercy Madaki, who was making her beans cake (akara) with a gas cooker at the Dawaki area of Abuja, yesterday, noted that not only has the price of gas made her business unprofitable, but the situation has been compounded with the high cost of other food items.

Lamenting over the development, Madaki said that she could not fold her hands and stay indoors despite the rising cost of cooking gas.

The Ghana National Petroleum Corporation, Petroleum Commerce Research Chair, University of Cape Coast Oil & Gas Studies, Prof. Wunmi Iledare, who noted that cooking with kerosene is as bad for public health as deforestation to the environment, added that the prevailing development affects the standard of living and sustainable development.

Iledare stressed that the country may only be flagging its 206 trillion standard cubic feet of proven gas reserves, which does not benefit the masses.

“A significant amount of investment is required to translate the reserves to usable form,” Iledare said, adding, “LPG is a cleaner fuel but affordability makes delivery tasking without lowering cost of production.”

According to him, the public must perish the thought that everything must be free because there is petroleum in the land.  Iledare said: “Petroleum production is good for nothing if its development does not improve the quality of life of the people, not just the elite. It is also nothing if sustainable development is not optimised.”

With the increasing cost of living, unemployment, as well as unabated poverty rate,  the vast majority of Nigerians would be pushed to resort to fuel wood for cooking hence increasing deforestation in the country.

“It is unfortunate that many do not know the wide and diverse negative impact of increasing deforestation on the economy, the people and the planet. Nigeria, all nations of the world had a historical economic loss to the COVID-19 pandemic,” Adeleke said. 

The Special Adviser to the Minister of State for Petroleum Resources on Gas Business Development, Brenda Ataga, corroborated that the commodity may not become affordable unless the development of the resources is domesticated.

According to her, the price may continue to rise because prevailing micro-economic indices are rising, adding that there was the need for more Nigerians to invest in developing the sector.

The Programme Manager, National LPG Expansion Implementation Plan, Dayo Adeshina, on his part said that the product, which had sold at $260 per ton in January now sells for $650 per ton at the international market.

According to him, while the same pricing index used at the international market is used locally, the depreciation of the naira against the dollar is currently fueling the hike in price.

Adeshina explained that the Federal Government is currently working on other domestic sources, noting that it was imperative to drive a large volume into the market to ensure competition. 

“When a large volume comes into the market, then we can start to see a decrease in price. One of the things we don’t have control over is the pricing index,” he said